Sherner v. National Loss Control Services Corp.

2005 MT 284, 124 P.3d 150, 329 Mont. 247, 2005 Mont. LEXIS 473
CourtMontana Supreme Court
DecidedNovember 15, 2005
DocketNo. 04-118
StatusPublished
Cited by2 cases

This text of 2005 MT 284 (Sherner v. National Loss Control Services Corp.) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sherner v. National Loss Control Services Corp., 2005 MT 284, 124 P.3d 150, 329 Mont. 247, 2005 Mont. LEXIS 473 (Mo. 2005).

Opinions

CHIEF JUSTICE GRAY

delivered the Opinion of the Court.

¶1 Peter R. Sherner (Peter) and Deborah Sherner (collectively, the Sherners) appeal from an order of the Thirteenth Judicial District Court, Yellowstone County, granting summary judgment dismissing all their claims and awarding costs to the defendants. We affirm in part, reverse in part and remand.

¶2 We restate the issues on appeal as follows:

[251]*251¶3 1. Did the District Court err in granting summary judgment to Cathy Andersen on the basis that she acted within the course and scope other employment?

¶4 2. Did the District Court err in granting summary judgment to all defendants based on § 33-1-1210, MCA, which generally grants immunity to those who report insurance fraud?

¶5 3. Did the District Court err in granting summary judgment to all defendants on the malicious prosecution claim?

¶6 4. Did the District Court err in setting the amount of costs awarded to three defendants?

¶7 The Sherners also challenge the District Court’s conclusions that the Workers’ Compensation Court has exclusive jurisdiction over this case and that the claims against Conoco must fail based on res judicata, and argue that the District Court erred in dismissing their claims based on negligence, negligent and intentional infliction of emotional distress and violation of statutory and constitutional rights. Based on our decision on the merits of Issues One and Two, it is unnecessary to farther consider these claims.

FACTUAL AND PROCEDURAL BACKGROUND

¶8 Peter was seriously injured in August of 1995 as a result of exposure to hydrogen sulfide gas while working at the Conoco refinery in Billings, Montana. Conoco is a self-insured employer under the Montana Workers’ Compensation Act. Peter continues to receive workers’ compensation benefits because of his injuries.

¶9 The Sherners brought suit against Conoco and its employees, alleging their intentional and negligent acts resulted in Peter’s injuries. See Sherner v. Conoco, Inc., 2000 MT 50, 298 Mont. 401, 995 P.2d 990 (Sherner I). The Sherners eventually obtained a $1.9 million judgment in that lawsuit, which Conoco paid in September 2001.

¶10 In January of 2002, the Sherners filed their complaint in the present case against Conoco, National Loss Control Services Corporation (National), Crawford & Company (Crawford) and Cathy Andersen (Andersen), a Crawford claims adjuster. They allege the defendants acted with malice in encouraging the State Auditor to investigate Peter for allegedly defrauding his insurer, which resulted in criminal charges against him. The Sherners sought damages for intentional infliction of emotional distress, negligent infliction of emotional distress, and violation of their statutory and constitutional rights. The complaint also sought damages for malicious prosecution. The Sherners’ complaint in the action underlying this appeal was [252]*252based on the following facts and events after Peter’s injury.

¶11 National has been the adjuster for Peter’s claims since his injury. Intermountain Claims (Intermountain) served as National’s local claims adjuster in Montana until January of 1998, at which time Crawford took over its duties. In June of 1996, Peter requested home health care assistance. After receiving confirmation from Peter’s treating physicians that home health care was medically necessary, Intermountain authorized a home health care attendant for Peter for nine hours a day, seven days a week, subject to periodic review. The home health care attendant was to provide light housekeeping and personal care assistance.

¶12 Tracey Sherner (Tracey), the Sherners’ daughter-in-law, initially provided the care. She submitted time sheets and a bill totaling $9,000 for services in 1996. However, an investigator for Intermountain conducted surveillance and found that Tracey was not actually with Peter at all times for which she billed. Intermountain filed a workers’ compensation petition against Tracey alleging fraud. The dispute was settled in May of 1997, and Intermountain informed the Sherners, through their attorney, that Peter’s home health care must be provided by a properly certified and licensed home health care aide and not by a family member.

¶13 In November of 1996, the Sherners chose their neighbor Bernice Corcoran (Bernice) to provide home health care services. Bernice was not a certified home health care aide when she started, but attended classes at a local nursing home and earned her certification while providing services for Peter.

¶14 On November 28, 1997, the Governor’s Fraud Hot Line received an anonymous call that Bernice had been submitting time sheets claiming to have provided services to Peter which she had not provided. Intermountain was notified and tried to verify with Peter’s doctor whether he was still in need of home care. The doctor Intermountain had previously consulted was no longer providing Peter’s health care.

¶15 In January of 1998, Crawford replaced Intermountain as National’s local claims adjuster. In January of 1999, Crawford adjuster Andersen noted discrepancies in Bernice’s billing statements. Crawford requested evaluation of Peter by his treating physician, who verified that Peter’s maximum of nine hours a day of home health care was necessary and appropriate.

¶16 Crawford then hired a private investigator from BCI, Inc., to observe Bernice and determine if she was actually providing care to [253]*253Peter at the times claimed. BCI’s surveillance revealed that Bernice was not with Peter on some days for which she billed. Crawford also interviewed both Peter and Bernice, and confirmed that Bernice was not providing all the services for which she billed. Accordingly, Bernice’s services were terminated on November 17, 1999.

¶17 National then referred its concerns regarding Bernice’s services to the State Auditor-the ex officio insurance commissioner in Montana-whose office conducted its own investigation into the matter. In response to a written request, National and Crawford each provided the State Auditor with copies of all of the documents each possessed relating to Peter’s workers’ compensation claims, and otherwise cooperated with the State Auditor’s investigation. The State Auditor also obtained payroll records from Saint Vincent Hospital, where Bernice worked part-time, and discovered that Bernice was working there during some of the times she claimed to have been providing home care to Peter. Bernice later admitted to having “double billed” her time.

¶18 On January 29,2001, with the State Auditor’s attorney-who had been specially deputized as a deputy county attorney-serving as the prosecutor, the Yellowstone County Attorney filed criminal charges against Peter and Bernice. The Information filed on behalf of the State of Montana charged Peter with felony theft by common scheme because he signed the fraudulent bills Bernice submitted.

¶19 During discovery, Bernice admitted she had “subcontracted” with the Sherners’ son, Trevor, to pay him $400 a month to provide some of his father’s home health care. Neither Bernice nor the Sherners ever reported this arrangement to anyone at Conoco, Intermountain or Crawford. Trevor kept no records of when he provided services, and he was not a certified home health care provider.

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Related

Boyce v. Carpet Plus
2016 MT 258N (Montana Supreme Court, 2016)
Sherner v. NATIONAL LOSS CONTROL SER. CORP.
2005 MT 284 (Montana Supreme Court, 2005)

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Bluebook (online)
2005 MT 284, 124 P.3d 150, 329 Mont. 247, 2005 Mont. LEXIS 473, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sherner-v-national-loss-control-services-corp-mont-2005.